Union Bank of the Philippines is planning to raise up to P20 billion in fresh capital either from existing shareholders or from new investors even as it reports a 5 percent dip in net income for the first nine months of the year.
In a disclosure to the Philippine Stock Exchange, the bank said its Board of Directors has approved the capital raising activities which may take the form of a stock rights offering to all existing shareholders or a private placement, subject to market conditions.
UnionBank also disclosed that it booked P10.1 billion in net income in the first nine months of the year from P10.7 billion in the same period of 2021.
“Our earnings result translates to a return on equity of 10.4 percent which takes into consideration the impact of the additional capital of P40.0 billion from our Stock Rights Offer last May 2022,” the bank said.
Net revenues excluding trading gains increased by 37 percent year-on-year to P36.0 billion. Net interest margin also increased to 4.9 percent from 4.6 percent in the same period last year coming from the expansion of earning assets and higher CASA ratio.
Net loans are up by 37 percent year-on-year to P449 billion, while CASA posted a record-high of 31 percent growth year-on-year to P417 billion.
Fee-based income increased by 64 percent to P5.1 billion driven by customer fund transfers and card transactions, bancassurance fees, and forex income.
As of end-September, the Bank has crossed the one trillion mark in terms of assets for the first time, with total assets at P1.05 trillion, higher by 37 percent year-on-year.
“We have successfully closed the acquisition of the Citi consumer business and became the legal owner of the portfolio last August 1, 2022. The transaction added P98 billion of total assets to the Bank, including P65 billion in net loans and P30 billion in cash. It also included P67 billion in deposits with a CASA ratio of 89 percent,” said UnionBank Chief Finance Officer Jose Emmanuel U. Hilado.
He added that, “We are confident that the integration would be seamless as 1,500 former Citi employees, including 100% of the senior management of the consumer business, have joined UnionBank.”
“This year, we made significant headways toward our aspiration of becoming a Great Retail Bank. Our consumer loans now account for 52% of our total loan book, which is more than double the industry average.” said UnionBank President and CEO Edwin R. Bautista.
He noted that, “Our retail customer base has doubled in the past three years mainly coming from our digital account opening and cash management ecosystems. We are seeing strong momentum in terms of new-to-bank customer acquisition. All these milestones have set us up for continued strong growth in the retail market.”
Meanwhile, the bank reported that it has appointed Erwin Wiriadi as Acting Chief Risk Officer, effective immediately, subject to confirmation of the Bangko Sentral ng Pilipinas.
Wiriadi joined the Bank on August 1, 2022. He was the former Director and Head of Consumer Risk Management of Citibank N.A. Philippines. He has been with Citibank for 26 years and has also held various capacities in Citibank N.A. Indonesia.
He graduated from The Ohio State University with a degree in MSc Industrial and Systems Engineering.